CAIB 3 Study Guide Questions with Answers
Identify the two dimensions of the risk management process - ✔✔1. A decision process
2. A management or administrative process
Identify the five steps in the decision making process - ✔✔Step 1 - Identify & analyze loss
exposure
Step 2 - Examine alternative risk management techniques
Step 3 - Select risk management techniques
Step 4 - Implement techniques
Step 5 - Monitor results
Identify the four administrative areas in the risk management process - ✔✔1. Plan
2. Organize
3. Lead
4. Control
Identify five advantages or achievable results of brokers who use a risk management approach
with their clients - ✔✔1. A more informed clientele
2. Increased retention
3. Increased customer referrals
4. Increased claims satisfaction
5. Reduction in errors & omissions potential
Identify the purpose of Identification and Analysis - ✔✔Identification - Involved recognizing
losses which might possibly occur
Analysis - Involves estimating the likely significance of those possible losses
, Why must risks be properly identified and analyzed - ✔✔Unless risks are properly identified and
analyzed they cannot be properly managed
Identify the three classifications that all loss exposures can be divided into - ✔✔1. The type of
value exposed to loss
2. The peril causing the loss
3. The financial consequences of the loss
Identify the four broad categories that the type if Value Exposed to Loss fall into - ✔✔1.
Property values
2. Net income values
3. Liability loss
4. Personnel loss
Identify the two types of Property Values - ✔✔1. Tangible
2. Intangible
Define Tangible Property - ✔✔Is real, can be touched, and has form and substance.
Explain Real Property - ✔✔Consists of land and generally whatever is erected or growing upon
or affixed to land
Explain Personal Property - ✔✔All tangible property other than real estate, item's subject to
loss include money, stock, furniture, equipment and supplies
Explain Increased costs of construction - ✔✔Building codes are continuously being revised to
improve building standards. Costs to meet these newer, stricter standards will be more than
those that would have satisfied older codes
Identify the two dimensions of the risk management process - ✔✔1. A decision process
2. A management or administrative process
Identify the five steps in the decision making process - ✔✔Step 1 - Identify & analyze loss
exposure
Step 2 - Examine alternative risk management techniques
Step 3 - Select risk management techniques
Step 4 - Implement techniques
Step 5 - Monitor results
Identify the four administrative areas in the risk management process - ✔✔1. Plan
2. Organize
3. Lead
4. Control
Identify five advantages or achievable results of brokers who use a risk management approach
with their clients - ✔✔1. A more informed clientele
2. Increased retention
3. Increased customer referrals
4. Increased claims satisfaction
5. Reduction in errors & omissions potential
Identify the purpose of Identification and Analysis - ✔✔Identification - Involved recognizing
losses which might possibly occur
Analysis - Involves estimating the likely significance of those possible losses
, Why must risks be properly identified and analyzed - ✔✔Unless risks are properly identified and
analyzed they cannot be properly managed
Identify the three classifications that all loss exposures can be divided into - ✔✔1. The type of
value exposed to loss
2. The peril causing the loss
3. The financial consequences of the loss
Identify the four broad categories that the type if Value Exposed to Loss fall into - ✔✔1.
Property values
2. Net income values
3. Liability loss
4. Personnel loss
Identify the two types of Property Values - ✔✔1. Tangible
2. Intangible
Define Tangible Property - ✔✔Is real, can be touched, and has form and substance.
Explain Real Property - ✔✔Consists of land and generally whatever is erected or growing upon
or affixed to land
Explain Personal Property - ✔✔All tangible property other than real estate, item's subject to
loss include money, stock, furniture, equipment and supplies
Explain Increased costs of construction - ✔✔Building codes are continuously being revised to
improve building standards. Costs to meet these newer, stricter standards will be more than
those that would have satisfied older codes
